Sounds like a lot of work for something that, in my opinion, will never cause much of a problem. You're going to have other major issues before anything rusts to the point of failure back there. Maybe clean it up a little, but I'd personally just make sure it was nice and dry and spray over it. 2 cents.

I dropped the spare and got under there with a wire wheel, PITA! I was only able to get some of the rust off of the inner passenger side frame. I don't know if a grinder would work better, or it just might be over my head. I might get a quote from a local body shop and see what they say.

clean it up much as you can and use rubberized undercoating have you tried one of those flappy sandpaper wheels (dont forget the eye protection had a friend lose the sight in his eye when one of the wires in a wire wheel come loose and pierce his pupil)
have you checked youre rear diff levels lately looks like its leaking

I dropped the spare and got under there with a wire wheel, PITA! I was only able to get some of the rust off of the inner passenger side frame. I don't know if a grinder would work better, or it just might be over my head. I might get a quote from a local body shop and see what they say.

I can't see the middle picture but the third indicates that you have rust under the factory paint. The good news is that it doesn't look like you have much metal loss.

I would not recommend simply painting over it, or getting a body shop to do that for you. The best way to fix it is to wire brush the coating off along with any loose rust then treat it with a product that stabilizes the rust, then paint it with an inexpensive tractor implement paint.